Microsoft said Peach's technology would enable cable television operators to deliver content and services, including interactive services, Internet access, e-mail and instant messaging, to consumers over their existing network infrastructure.

Formed in 1998, Peach is based in Woburn, Mass., and is a wholly owned subsidiary of Peach Networks Ltd. of Or Yehuda.

In a related move, Microsoft is teaming up with Petach Tivka-based Gilat Satellite Networks Ltd. in a $50 million joint venture dubbed Gilat-To-Home, aimed at providing high-speed Internet access by satellite to remote areas.

The company said that Microsoft would own 26 percent of Gilat-To-Home while Gilat would hold another 35 percent. The company, which will be based in McLean, Va., is expected to begin providing service by the end of the year.

Gilat-To-Home hopes to build up a base of 2.7 million subscribers by 2005 and expects that satellite Internet service will be 10 times faster than personal computer modem speeds.